Now is the Time to Outsource Your Investment Research

Posted by Ankit Kohli on December 16th, 2015

Outsourcing investment research has been a widely adopted practice by financial research firms, especially those on the sell side. As more and more opportunities arise in the market, an investment banking team can hardly spend the long hours necessary to do all the legwork itself and also pitch to clients or do road shows at the same time. Though a down economy may stall the investment banking engine for a while, a good banker knows that opportunities abound in such markets also.

Moreover, with developed markets on the upswing and the focus back on equities, the outlook for investment research only looks bright. The optimism is helping thaw the reluctance to look at not-very-well-known but more reliable opportunities. Investment research can help here in innumerable ways. In fact, the extent to which an investment bank relies on investment research firms is likely to play a pivotal role in helping offer them the appropriate services to their end-clients.

For instance, timely equity research will help assess any upward revision in stocks or market equities and enable investors to take the right decisions. The research will allow clients to follow the financial trends across various industry verticals and corporate bodies. The relevant analysis of the information will allow clients, individuals, brokers and customers to invest wisely for both long-term and short-term profit.

Here’s a look at why outsourcing investment research is a smart move for sell-side firms and even investment research providers:

• Reduced time-to-market:Having a dedicated research team working with them, the sell-side firms or investment research providers can considerably reduce their time-to-market. This allows sell side firms to introduce their clients with new products and services before the competitors can do the same.
• Wider and more in-depth coverage: The presence of a larger talent pool in the specialist investment research outsourcing firms allows for a wider look at industries and a more in-depth analysis of each sectors and geographies. The resultant analysis of this wider universe gives better investment options to banks and institutions that they can provide their clients.
• Deeper distribution: A partnership with an investment research specialist can help banks and financial institutions to drive further inroads into their client base. They can approach a larger number of possible clients from larger institutions to smaller ones with a wider variety of products that provide the niche services required by the client.
• Transparent analysis: Outsourcing investment research involves hiring a specialist firm with experience and expertise in the research and analysis of complex investment portfolios. These experts provide results that are backed by adequate and irrefutable data. It makes sense for the investment banker to trust a firm that derives results based on a clear and transparent rationale that adheres to the bank’s own as well as statutory parameters.
• Availability of extra time: Since the monitoring of assets, markets and portfolios is outsourced to reliable external experts, financial advisers have more time available for networking with new clients and maintaining a strong and a healthy relationship with the existing ones.

About the Author:

Pure Research provides customised research and business intelligence to corporates, public sector organisations, financial services firms, and professional services firms worldwide. The company delivers high quality procurement and supply chain intelligence to procurement professionals and their organisations. It provides business and market intelligence to strategy and marketing teams at corporations, and to professional services firms. Pure Research also provides customised financial research and ESG research to financial services firms. Analysts from Pure Research work as an extension of their client organisations to deliver high quality research and insights. The company has offices in London, U.K. and Delhi, India.